On June 14, 2017, the Federal Reserve (Fed) made an announcement that was a little more hawkish than expected by the market, Jordan Eliseo, chief economist at Australian-based precious metals trader ABC Bullion, said in a telephone interview with Kitco News. Gold bulls shouldn’t be too worried, however, as Eliseo added that he still retains a positive outlook on gold prices.

Investors were mainly concerned about talks of balance sheet reduction found within the Fed’s announcement. Eliseo explained the current situation, “Given the general softness in economic data of late, the market was expecting the Fed to tread a very fine line. But, the talk around balance sheet reduction made people think the Fed is a bit more certain about its strategy and convinced that it will continue to hike.”

Before both the Fed’s announcement as well as the press conference held by Fed Chair Janet Yellen, gold prices were up almost $1,280 an ounce. Almost immediately after the Fed’s press release, gold dropped by around $15, Eliseo noted. However, the price has since then recovered somewhat. Last week, spot gold being traded on Kitco.com was priced at $1,264.50 during opening hours of the Asian trading session.

Despite its drop, Eliseo insisted that gold is still in a good spot as the metal continued to trade above $1,260 an ounce. While there is a bit of volatility in prices, gold bulls needn’t worry as Eliseo believes that the Fed didn’t do huge damage for gold over medium-term. Many technical analysts also remain optimistic thanks to the fact that, prior to the Fed announcement, gold prices were driving towards $1,300 an ounce.

While Eliseo believes that prices will most likely remain the same for now — around $1,260 to $1,280 an ounce — the highly anticipated price of $1,300 an ounce might not be very far off in the future. To get more bullish, though, Eliseo said that gold prices will have to get up to at least $1,320 an ounce.

If all goes well, gold prices have the potential to get as high as $1,350 to $1,400. It’s a good time for those who can afford it to invest and buy up some gold. Regarding the quite-possible rise to $1,400 an ounce in price despite the metal’s current decline, Eliseo said, “This would be excellent for precious metals bulls. It’s already been a reasonable year. I’d be surprised for it to go much further than that in the second half of 2017. We will have to wait and see how economic data comes in and how the Fed reacts to that or any potential changes in Washington. There are a number of variables that could drive prices.”

When it came to concerns about the Fed raising rates higher, Eliseo said he doesn’t think it will be likely. He explained that he has personally been on the dovish side regarding the current gold situation — after studying the dot plot as well as the bond market, he believes rates won’t even have a chance go as high as predicted. The Fed could very well end up being more dovish than what their announcement would suggest, Eliseo, noted.

With the Fed announcing its rate decision, Eliseo suggested that investors keep a close eye on other market events, like the Bank of Japan meeting, Europe’s release of its inflation data, and the U.S.’s monthly release of its data. These events will be essential in making a more accurate prediction on what the Fed may do next.

Featured Image: twitter